Great news for all of us who write and read, in my opinion. The print book, which still remains anywhere from 70-90% of the market for book sales (depending on which statistic you’re looking at this week), is alive and well and its death has been greatly exaggerated.

About 30% of those e-book sales come from independent (self-published) authors. That’s about 210 million ebook sales that did not come out of traditional publishing. The bulk of those sales, as we all know, came in the last few years, not in the early years.

The expanding use of the phrases “ebook plateauing” or “ebook slowdown” are signs of a negative narrative that many in the industry seem to be pursuing – a narrative that is simply not backed up by the data. Show me any other area of publishing that has seen 43% revenue growth year on year. In fact, show me any area of any industry that has. Growth is good. We are in a booming market. Exciting? Positive? I’d say unequivocally YES.

Our industry is growing. We are getting new bookstores, new readers, new writers, and we haven’t hit the peak of the market yet. Why not? Because traditional publishers dropped the ball decades ago. Traditional publishers forgot that they sell books to consumers. Instead, they changed their business model to sell books to bookstores. When the independent bookstores declined at the turn of this century, traditional publishers started marketing to the big distributors and to the chain bookstores, which was why you heard such industry-wide panic when Borders went down. It wasn’t because the readers went away; it was because traditional publishers had no idea how to sell their books to people other than the ten to twenty buyers for national distributors and chain bookstores.

In the early 2000s, I had books rejected by big publishers with these comments. We love it, but we know we can’t sell this title to Walmart. We love it, but we checked with the buyer for Borders, and he doesn’t think the book will sell so we must decline. I’m not the only writer who experienced such things. When your business model is based on selling to ten or twenty people who act as the only gateway to millions of consumers, then those ten or twenty people wield a disproportionate amount of power.

That power is dissipating because of the rise in online book sales. As we discussed two weeks ago, by online book sales, I don’t just mean e-books or books sold on the big chain store sites like Amazon or Barnes & Noble. Small booksellers are also putting their inventories online, and they’re using online catalogues from the big distributors to introduce flexibility into the brick-and-mortar stores.

Let me give you an example.

Pretend you own a small bookstore that rents 500 square feet of space in the local strip mall. You cram as many bookshelves in that space as possible and maybe, like one of our local used bookstores, you use floor space as well.

Five years ago, when you ordered books, you ordered them in groups. If you thought John Q. Writer’s relatively thin Newthriller would sell well, you’d order five copies, and put them all on the shelf. If you thought Susie Fantasist’s fat fantasy Seriesbook12 would sell well, you’d order three copies because that would be all that could fit in the slot you had designated for new fat fantasy novels.

If you gambled wrong on Newthriller, you could return four copies of that book for full price at the end of the month or six weeks. But for that month, Newthriller wasted shelf space you could have used for other books.

Now, you would put one copy of Newthriller on the shelf. You might order two copies of Seriesbook 12 because, the previous year, Seriesbook 11 sold fifteen copies from your store over the space of two months. If you sell one copy of Seriesbook 12, you can order two more and get those books with a day or two from your favorite distributor.

This way, you have room for Karl Kid’s Debut, and Megan Unknown’s Attempt. You only have one copy of those books and you have no idea how they’ll sell, but you figure you can devote a little shelf space to writers whose work has never appeared in your store before.

Unfortunately for John Q. Writer and Susie Fantasist, you have just ordered fewer copies of their books. It doesn’t matter that you would have returned four copies of the five you’d ordered for John Q. Writer. Those books would have appeared in a different portion of John Q. Writer’s royalty statement nearly a year away.

Right now, what John Q. Writer and Susie Fantasist see is that the initial print orders for their books have declined precipitously. It doesn’t matter that they are probably selling the same number of actual copies. Because John Q. Writer and Susie Fantasist are bestsellers, they publish at least one book per year, and have been trained to look at initial print orders instead of actual sales.

Why? Because actual sales can’t be determined for years. Some high-volume bookstores can return books after six months and receive full credit. In the old system, no one knew how well a book actually sold for at least three years after publication. By then, the hardcover was off the shelf, the mass market was doing its thing, and bestselling writer was looking at initial print orders for the mass market, if she was even looking at initial print sales for a book that was three books back. Most bestsellers don’t look back that far.

This change, which favors the newer writer, the midlist writer, and the bookstore itself, is why you will hear so many long-time bestselling writers complain about the decline in book sales. It’s also why you’ll hear traditional book editors, who don’t see the long-range sales figures, make that same claim. They base all of their decisions on initial print orders, not on actual sales.

The fact that other writers are now going to have brick-and-mortar shelf space also means that readers will discover writers they’ve never heard of. As we discussed in the comments of the last three blogs, readers now have the option of picking the exact book they want to read when they want to read it. Instead of buying the latest James Patterson in the airport bookstore while running to catch a plane because you finished the book you’d brought with you and he was the only author there who you marginally liked, you can download a dozen books on your e-reader. Or, you might find someone new on the shelves, because this new ordering system means that a lot of writers who are new to you will share physical shelf space with the bestsellers.

I know you’re all familiar with this, because I’ve been discussing it for the past few weeks. But here’s a chart (scroll down to the bottom of the page) that shows you exactly how this change will impact the major bestsellers, and through them, traditional publishers.

Those of you who clicked on the link were probably surprised to see that I just gave you a Wikipedia chart of Top-rated TV programs throughout the history of Nielsen ratings. But the parallels are instructive.

Back in the 1950s, there were only three television channels, which meant that only three programs competed with each other in the prime time slots. From 1952 to 1955, I Love Lucy cornered anywhere from 49.3% of available viewers to 67.3% of available viewers.

Between 1949 and 1969, the number of households in the U.S. with at least one TV set rose from less than a million to 44 million….Between 1959 and 1970, the percentage of households in the U.S. with at least one TV went from 88 percent to 96 percent.

This is actually important, because if you think about it, most non-urban areas within the United States do not have a bookstore of any stripe within 1 hour driving distance. The book suppliers to those places were grocery stores or places like Walmart, which in the last decade, cut back the number of books they carried. Many readers went without new books at all. Some used local libraries. Others found different forms of entertainment.

The brilliant thing about Amazon and other online print booksellers is that they started to tap that unseen book market. Metaphorically, they’re increasing the number of book buyers across the U.S. just like the drop in TV prices (and rise in local stations) increased the number of television viewers in the 1960s.

I know, I’m throwing a lot of numbers at you. And if I knew how to draw, I would give you a chart that shows how—with increased choices and viewership reaching all markets—the “bestselling” or most popular shows have fewer viewers than they did in television’s heyday.

This is because of choice. When you only have a choice of three programs, and you want to watch television, you watch the best of the three. When you have a choice of 200 programs, and you want to watch television, you watch the show you want to watch. And this doesn’t even count recording an episode for later or live-streaming or all those other things that are changing viewership patterns as I write this.

What happened to the big TV networks and the major producers of TV programs over the last 35 years is what’s happening to the big traditional publishers and their major bestselling writers right now.

Readers used to have a choice of the books on a brick-and-mortar store shelf or, if they were lucky, the thousands of titles (some old) in their local library. Now, readers can choose from millions of books at touch of a button, and receive those books in any format they want, from audio to e-book to print. (And those of you who are new to this blog who now want to ask me how to get discovered, please look at last week’s post.)

Traditionally published writers–whether they are bestsellers or not–are watching their initial print orders shrink. Bestsellers will see their actual sales decline, while midlist writers might see an increase in actual sales. Why? Because of that brick-and-mortar shelf space thing. Now shelf space that used to house ten Nora Roberts novels now holds only five, and the remaining five slots go to one copy each of a new writer (or new-to-you) writer that the bookstore deems worthy of inclusion in its small store.

Readers don’t care what business published a writer. Readers want a good story. Readers want easy access to the writer’s entire backlist. Readers now want books at their fingertips.

If you’re a traditionally published writer, you have already heard about smaller print runs and how that’s “worrisome” for the business. Publishers are asking their writers to take pay cuts, smaller royalties, tiny advances, and draconian contract terms because “the readers just aren’t there.”

Most traditional publishers do not understand how the change in ordering from brick-and-mortar store has impacted their bottom line. They don’t understand why readers have turned fickle and aren’t buying the Big Names in as big numbers as before. Traditional publishers think they need to advertise more or push harder, when in fact, they’re seeing that same leveling that the TV networks started to see in the 1980s.

With the exception of one or two cultural phenomenon books per year (think the last episode of M*A*S*H), few books will sell at the numbers they commanded at the beginning of the century. Yes, the number of readers is growing, and yes, the numbers of books being bought (in all formats) is increasing dramatically, but not all sales will go to traditional publishers.

Remember, 30% of ebook sales are, conservatively, going to indie writers. When those writers get their print publishing programs going, with this new change among the big distributors, the print sales for non-traditional publishers will also rise.

So if you’re traditionally published, your royalty statements for the next few years will look dismal, especially if you’re publishing a series. You’ll see that initial print order will have gone way down and it’ll look like you’re selling fewer books. The ebooks on your royalty statements won’t cover the difference between that initial print order from a few years ago and the one you’re seeing now.

Yes, it does. It lists books shipped. Then it has a place for returns. Those returns happen long after the book has been published. Once all the returns are in, you will see what your book actually sold.

The difference now is that your initial print order and your actual sales will be relatively close. In the past, the initial print order was usually double (and sometimes triple) the actual sales number.

The problem here for the traditionally published writer is this: All of traditional publishing’s systems, from deciding an advance to how many copies of a book to print, are based on the initial print order of the author’s previous book.

With initial print orders going way down due to increased efficiency in bookstores, advances will go down and some writers will get bumped from their publisher because their sales fell “dramatically.” No one ever looked at the returns.

So yes, traditionally published writers, it looks like you’re selling fewer copies of your book when you see your initial royalty statements. In truth, you might be selling more actual copies than you ever did, because your returns have been cut in half (or more. In some genres, returns were as high as 70% at one point.)

Traditional writers are going to have to survive a very ugly transition as traditional publishing companies change their systems from working off initial print orders and ignoring returns to working from actual sales.

I have no idea how to tell you traditionally published writers how to survive this change except to understand that it’s happening. You should also police your contracts well so that you can get out of your traditional publisher quickly. Even if you move to another traditional publisher, you need to make sure that your options are open.

The next two or three years in traditional publishing will see a lot of casualties. Writers will have to take smaller advances. (This is already happening.) Writers will also find themselves without a publisher much quicker than before. Traditional publishers won’t change their accounting practices quickly, and that too will hurt writers. It’s hard to negotiate from a position of strength when you have no idea if your actual book sales this year compare well or poorly to the book sales for your previous titles. Right now, royalty statements aren’t giving you (or the publisher) that information.

Hang on. Explore your options. Remember that indie publishing is getting easier and might be a good stop-gap between traditional publishers. Or it might be where you end up. Because other numbers are trickling in, numbers that are very startling (rather like that 30% figure above) which show that indie (self-published) writers are actually getting traction in the marketplace.

This next week, as the news comes out of traditional publishing’s biggest annual party, you’ll hear a lot of negativity about the state of publishing. Remember, for many in traditional publishing, the sales decline is very real. If you’re traditionally published, brace yourself for a bumpy few years.

If you’re indie-published, ignore the negativity. It doesn’t concern you. Your business is very different from that of traditional publishing. Facts and figures support the case that publishing is dying and the case that publishing is thriving.

It all depends on where you stand, how you define publishing, and what kind of business you’re actually in.

But do remember this: for readers, we’re heading into a new golden age. We have more choices than ever before. Have you asked yourself why television has had so many excellent programs these last ten years? It’s because of competition. And the best programs usually aren’t on the networks. The groundbreaking shows, the beloved shows, the scripted shows that are still water-cooler topics, have migrated to cable and premium channels.

Yeah, those shows might not have the initial viewership that All in the Family did. But many of them have the same cultural impact that All in the Family had.

Personally, I think choice is a good thing. Readers can now choose between a small subgenre novel that will never sell in the tens of millions of copies and the latest blockbuster. I don’t know about you, but I have both on my to-be-read pile. And that’s different from ten years ago. Ten years ago, I could only choose the blockbuster. Now I can read what I want to read when I want to read it.

It’s a new world.

I love it.

One part of this new world is this blog. I can write it at my desk, hit “publish” on my website, and within seconds, people from all over the world can read it. Right now, the blog has more readers than major magazines that I edited in the 1990s. That astonishes me and makes me very grateful.

Thank you for coming. I put this blog up for free so that you can have the information, but I do need to have these words pay at least a little bit toward my writing income.

So, if you’ve learned something or are getting something from this blog, please leave a tip on the way out. Thanks!

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45 responses to “The Business Rusch: The Changing Playing Field”

Kristine i get so tired of the way the media tries to shape the conversation by jumping on the first statistic they gather and declaring that traditional books are dead and all brick and mortar stores will close. In my daily travels i see too much evidence to the contrary.

Sure the amount of shelf space at Wal mart and other stores devoted to print titles has been reduced, but the fact is Wal mart work on a dollars per square foot model and the profit in books is less than some other items, thus the space devoted is less.

My local bookstore of choice is a Books A Million and it is always busy with people usually buying several several titles when they shop. The growth of the e-book market is impressive, but I feel no real threat to print. I hope the benefit will be to press the print publishers to be more responsive to potential authors instead of being so elitist and demanding unrealistic standards of the authors trying to learn the business.

You have supplied a great amount of information here. I have an unrelated question though.. How did you add the button to send your article to a Kindle device? is that confined to Blogger sites?

Thanks for the additional data points, Joe. Remember most of the media we see in the US comes out of NY, which is a company town. They don’t believe anything but traditional publishing exists. It’s like LA. The LA Times is having trouble dealing with all the new video media for the same reason–company rag in a company town. 🙂

As for the “send to Kindle,” this is a word press site. And that’s a word-press plug-in. I hope that helps.

So from combining several of your columns, I get that popular authors could be seeing an apparent drop in sells figures from current work, but if they have been careful with their contracts they could be see a dramatic increase of sales in their back list?

And publishers should be seeing quite a drop in expenses from not having to buy back so many returns? I would think as a reader, this would be a good thing.

There’s one bookstore (a B&N) in my town. The genre novels line the walls, in shelves that are at least nine feet tall. (I’m over six foot, and the top shelf is out of my reach.) There are no stools. The staff asks you not to climb the shelves to see the titles on the top shelf.

The comfortable tables and shelves? They’re filled with toys and gimmick books. The Complete Idiot’s Guide to Zombies for Dummies.

Book shopping is actively uncomfortable.

I’ve made do with online and Kindle purchases. Told myself that it’s probably for the best. I’m a book addict, after all, and the only way to deal with addiction is to go cold turkey.

But last weekend, I had to do a business trip to Toronto. I scheduled transportation so I had a few hours to kill wandering around the city.

Somehow, I found myself near “World’s Biggest Bookstore.” Somehow, two hours and two hundred dollars disappeared, and I found myself cramming books into my bag. A book-buying blackout. Probably not a good sign.

Random memory inspired by your mentioning TV and M*A*S*H: I once heard an interview where Jamie Farr said the audience ratings for the last episode of M*A*S*H would never be equaled by a fiction show. He didn’t want to sound full of himself (though to be fair, they had one HUGE audience there, after a decade of success). It was just that M*A*S*H’s ending more or less coincided with the last gasp of Big 3 network dominance. After that, the viewership was splintering to dozens, then scores, then hundreds of choices. There are too many channels now to ever again see that many eyes on the same channel at the same time.

As I frequently do, I scrolled down to read last Monday’s story after I read this post. With the Business Rusch post at the top of the page, the story extends down beyond the white background. You end up with a dark grey font on a black background, which is very hard to read. Is there any way you can set the blogging software to let the background extend the full length of the posted story? I end up trying to select all the text, so that it displays in a white font on the dark background.

I just checked on Safari and am not having that issue. Click on the title: Free Fiction Monday: Heroics” and you’ll go just to that post. You should be able to read it on your browser (whatever it is) there, as the only thing on the page.

I always read your posts religiously, I consider you one of the top gurus in publishing (and a damn good writer too…)This is a particularly interesting look at the other side of the coin: we’ve had a tendency to focus on what’s happening to the new and rising part of the market (ebooks and indies) and ignoring the other side, the traditional, apparently “stuck-in-the-past” publishing and brick-and-mortar bookstores. The news about reviving bookstores is particularly welcome and I hope the same happens in Europe where I live. Here in Rome, we’re into a deep recession, stores are closing down by the dozen every day but bookstores appear to survive and even thrive. At Christmas they were full, no doubt because books make nice (cheap) Christmas gifts!

Putting together this post with your two last ones, there is indeed a sense of “shifting sands” and possibly new opportunities for indies. Though I continue to feel that book discoverability is a problem that is far from being solved and that the digital revolution (for now) may have even made worse, largely by weakening the traditional publishers’ so-called “gate-keeping” role. I hope you will blog about this some more because I don’t feel that Amazon and the other e-platforms have solved the problem. They cannot replace the feeling of discovery one has when walking into a physical bookstore and (possibly) talking to the book seller or some other client in the store.

Every time I walk into a bookstore I discover new books I want to read. Everytime I open my Kindle store window, I cannot find any new book I want to read, all I get is the top 100 titles in terms of sales. That’s not what I’m interested in, I’ve been burned too many times by a “top 100” title (including Amanda Hocking’s) that I ended up disliking.

I understand that Amazon wasn’t born as a publisher but as an online store. And they apply standard business search systems to sell their wares (and do that very well indeed), which means focusing on top sellers rather than quality. But with two million titles alone on the Kindle, how can you expect the “cream to rise”? That’s too much to ask unless you give a push to “word of mouth” – so far that is expressed by their “customer reviews” and their “customers who bought item x also bought items y,z etc”. Very clever,but not enough, unless they start applying their rankings approach to customer reviews as well…For example, you could search in a genre and look for the top reviewed books (say the cut off might be 20 reviews averaging 4 stars or above – or whatever seems to be most appropriate) I also think the customer reviews themselves could be improved by linking the stars with the content of the review (but that’s yet another issue).

I’d love to have your views on how ebook sales platforms could improve their “sales windows” and the customer experience when searching for a new book to read…

Here’s another sign of how bad things can be for traditionally published authors, even successful New York Times bestselling ones: William Kent Krueger revealed on his blog today that his publisher, Simon & Schuster, has forbidden him from visiting any Barnes & Noble stores on his upcoming book tour.

I was, as the kids say, LOL and SMH at Anderson’s post. That it took 8 weeks to get this ancient crap stricken from the contract of a guy who’s sold about a bazillion books over the past 30 years?

Also big laughs that I was doing fanzines (yes kids, fanfic used to come on paper) in the late 80’s and early 90’s where submissions were all sent to me on floppy. So apparently I was decades ahead of the big NYC publishers!

I’m sure Ellora’s Cave, which started selling ebooks in 1998 and was selling in seven and eight figures by 2003 will be greatly surprised to learn that five years ago ebook sales were “zero.” Ditto for the other ebook publishers who’ve been in business for more than a decade. And yes, I am very, very tired of people writing articles about ebook publishing who can’t be bothered to do their homework.

HARLEQUIN DID NOT INVENT THE EBOOK. NEITHER DID AMAZON. In fact, Amazon owes the success of its ebook program to the ebook publishers who maintained discussion groups to which Amazon employees signed on so they could investigate how it was done. I know this because I was also on some of those groups.

So, could we please give credit where it’s due and acknowledge there was a thriving, if small, ebook industry long before 2008, and show some respect for the pioneers of that industry who put up with being sneered at and shunned by the “really published?” Just once?

Yeah, that bugged me too. I was with Fictionwise in 1998, so I know that this zero number was (more or less) wrong. But I didn’t want to do math for the percentages of total booksales versus e-book sales. I still think they were pretty low at the time, such as less than .1 percent of booksales, but I didn’t want to make a statistic up out of my ass.

We love it, but we know we can’t sell this title to Walmart. We love it, but we checked with the buyer for Borders, and he doesn’t think the book will sell so we must decline.

Thank you for saying this, Kris. For years, I thought there was something wrong with me because those were types of rejections I got. I didn’t understand for a very long time how I could be a “good” writer and “not sellable.”

The good news: I received a personal rejection that complimented my work. The slushreader liked it enough to pass it up the chain. The editor like it enough to pass it to the senior editor. The senior editor liked it but wrote (short version), “Good book, but it’s as much techno-thriller as science fiction, and I don’t know how to market that combination, so I’ll pass. Send us your next effort.”

Writers always have leverage, Jinni. They just don’t realize it. The first thing they can do is negotiate. The second thing they can do is say no. This idea that writers must accept the terms given because the writer is “weak” and the publishing industry “strong” is why so many writers get into bad situations.

I do agree that indie published writers understand that they have choices, but I’ve seen some of the contracts a few of those writers have signed with traditional publishers, and it looks like many of those writers (often with greedy agents) haven’t negotiated either.

Thanks for another fantastic, informative post. I have to admit,when I first went to that Nielsen Wikipedia link, I was scratching my head. (TV shows? What do they have to do with the price of apples?) But once you explained why you included that, I began to understand.

And, yes, choice is definitely a good thing. Now if the page layout software would just penetrate my brain a little quicker, I can finally get my first series up in print! 🙂

Being a former newspaper editor of more than 20 years, and having been on the fringes of traditional book publishing for about the same period when I was mainly a short story writer, it has always seemed as if the sky was falling. Every year was worse than the one before, author’s advances were dwindling, etc.

But somebody, somewhere is making money.

It got to the point where I just shrugged it off. This was a repeat of the boy who cried wolf, in my opinion.

That’s not to say the next few years won’t be tumultuous for book publishers, because I’m sure it will, but I do think they’ll survive (for the most part). The great thing about today, as compared to even five years ago, is that writers now have other options available to them.

Exactly, Ty. But traditionally published writers should know how drastically things are changing for them. If they think it’s personal, they won’t understand what they can do about those changes–like changing publishers or becoming an indie writer.

“When your business model is based on selling to ten or twenty people who act as the only gateway to millions of consumers, then those ten or twenty people wield a disproportionate amount of power.”

I could’nt agree more. But in brick and mortar stores, independant or not, there will always be people who wield disproportionate amount of power : the booksellers.

Recently, at a signing book session, my heart sank when I saw a bookseller remove from the shelf a book of an indie author I knew which was just released. What a power they have. It’s such a simple thing to do for them.

There’s also coop : there will always be entities (corporations, or even individuals) willing to rent the shelf space, and booksellers to prefer the financial security brought by the rental.

So, even if I salute the new distribution perspectives, and if I’m willing to embrace them, I definitely prefer the digital world.

(And despite all of that, believe me or not, I pull a lot of effort to make the most beautiful paperbooks I can).

Also, Kris, when you tell us about the 27% increase in foot traffic in bookstores : is it reflecting into sales ? I ask, because there are many people who go in bookstores just to get ideas about what to read, and then order the books online (being ebooks or paper books).

If the sales are up in bookstores, we have to be cautious because of the return practice you mentioned, and the delay of three years necessary to know exactly about sales.

Yes, sales are up, Alan. I mentioned that in one of the previous posts. (I think. Or did I just plan to do that? Hmm. Better check.)

I’m all for booksellers doing what they need to do. They’re running a business, and they must do what’s best for their business. That they’re learning how to do business in the modern era is good for them and for writers. So I don’t begrudge that.

I do begrudge big traditional publishers too lazy to realize they too are selling to readers and need to find the readers wherever they might be.

Correct me if I’m wrong, but if Walmart-Castle Rock has an overstock of M. Unkwnown’s book but Walmart-Colorado Springs wants three, Walmart will “offload” the first ones to the publisher instead of using its own distribution channel (hell, even a bike; it’s a 40m run). How much does this distribution “outsourcing” cramp business?

WRT airport bookshops: they’re boring. Travel guides (trite), bestsellers (oh, joy) and names. I grant you I haven’t been to a US airport bookshop in a couple of years, and it might have changed, but they’re, at best, generic. I prefer my bookshops “local”.

I honestly don’t know how Walmart’s internal warehouse system works. It’s a very efficient corporation, so I suspect that the stores send their overstock back to the warehouse or just discount everything that doesn’t sell.

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